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In a politicized environment, getting on the wrong side of regulators can be dangerous. Don't be surprised if banks and insurers cave.

Do you need another demonstration of how dangerous regulatory power can be when it's weaponized by politicians? Look no further than New York Gov. Andrew M. Cuomo's recent directive to financial regulators. Cuomo wants them to pressure private companies to break ties with the National Rifle Association (NRA). The "or else" is just a hair from being overt.

"I am directing the Department of Financial Services to urge insurers and bankers statewide to determine whether any relationship they may have with the NRA or similar organizations sends the wrong message to their clients and their communities who often look to them for guidance and support," the governor wrote in a statement.

The Department of Financial Services, which regulates the banking and insurance industries in New York, followed up with guidance letters to insurance companies and banks.

The two letters caution recipients that "[t]hey are in the business of managing risks, including their own reputational risks, by making risk management decisions on a regular basis regarding if and how they will do business with certain sectors or entities." The guidance then includes slight variations on the following language from the banking letter:

The Department encourages its chartered and licensed financial institutions to continue evaluating and managing their risks, including reputational risks, that may arise from their dealings with the NRA or similar gun promotion organizations, if any, as well as continued assessment of compliance with their own codes of social responsibility. The Department encourages regulated institutions to review any relationships they have with the NRA or similar gun promotion organizations, and to take prompt actions to managing these risks and promote public health and safety.

Keep in mind that the regulatory body that oversees these industries is warning companies under its power that they may be assuming reputational risk—a regulated area that draws official attention—by doing business with legal organizations including the NRA. This reputational risk is said to exist because these groups are "gun promotion organizations," which boils down to nothing more than them taking a public policy positions at odds with those favored by the state's political leaders.

Of course, this isn't the first time that a government body has been weaponized for political use. "My father may have been the originator of the concept of employing the IRS as a weapon of political retribution," Elliott Roosevelt observed of President Franklin Delano Roosevelt. The federal tax agency remained a handy bludgeon for politicians from that day through the present, including its recent deployment against Tea Party groups.

Usually, such abuses are at least thinly veiled, because they're widely acknowledged to be wrong. But this isn't really the case in places like New York, where everything is politicized and much business requires an "expediter, an imprecise term that is used to describe the men and women whose workdays are spent queuing up at the Manhattan branch of the New York City Department of Buildings to file the documents and pull the permits that allow construction projects—your kitchen renovation and the high-rise next door—to go forward," as the New York Timesput it in 2014. Expediters often bribe officials to speed up the process—or to just get anything done. Attorney John Chambers, who expedites gun permits in New York City, was recently convicted of bribing an NYPD sergeant.

Not much has changed since then, as business hopefuls continue delivering bribes to current Mayor Bill de Blasio and Governor Cuomo in hopes of getting their projects green-lighted (the officials themselves remain seemingly immune to prosecution for receiving bribes—probably because they make the laws). In such an environment, it's natural that officials see granting or withholding permission to do pretty much anything as a natural perk of the job. And what's more natural than for them to make continued permission to do business conditional on isolating political enemies?

As Brian Doherty noted the other day, Brooklyn Borough President Eric Adams and New York City Councilmember Justin Brannan seemed astonished that anybody thought it inappropriate that they lean on local businesses to deny venues to Brooklyn Friends of the NRA. At least one restaurant canceled a gathering for the group "after federal, state and city politicians blasted the event as 'profoundly disappointing,'" reported the New York Daily News.

Of course they canceled. Brookyn restaurants are businesses that get to keep their doors open only with the goodwill of local officials. In such a politicized environment, getting on the wrong side of regulators can be dangerous.

Don't be surprised if banks and insurers also cave.

Weaponizing regulatory power—if normalized—opens the door for Cuomo's political opponents to do the same to his allies in the places where they govern. If liberals demonize the NRA, the equivalent bogeyman for their enemies is Planned Parenthood, which is vulnerable if conservative regulators adopt the same tactics. Actually, anybody who takes a controversial position on matters of public policy is at risk if the targeting of opponents through regulatory agencies becomes standard.

Yes, it's been done before, but making it explicit strips regulatory authority of any legitimacy. Punishing political opponents is a less compelling argument for such power than claims—valid or otherwise—that you're enforcing good business practices. If it becomes standard practice, people are entitled to view regulators as nothing more than partisan hitmen, and treat them accordingly.

New York's long-established culture of corrupt and weaponized use of government power is a stain on the state, not something to be made official policy and extended to the country as an example to emulate.

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97 responses to “New York Officials Weaponize Regulatory Power Against the NRA”

It will backfire. It always does. I can guess some of the backlash — all conservatives, and a fair number of honest liberals, will be disgusted at such blatant abuse. It will also legitimize the practice and convince conservative politicians to pressure liberal causes, as happened with Delta Airlines and Georgia.

There’s also an economic aspect. Forced bias favors inefficient corrupt businesses, and honest businesses reap the reward of efficiency. Pension plans which divest for political reasons leave openings for savvy investors who are only interested in making money. Banks which turn down business opportunities because of political pressure will leave opportunities for other smarter investors. It won’t be a noticeable difference at first, but that will just embolden the corrupt politicians and the practice will expand until there is a very noticeable difference. I’m sure Chicago’s corruption started small, but they are drowning in debt now.

It’s infuriating now, but payback’s a bitch. When there houses come crashing down, I will be there laughing and enjoying the spectacle.

New York is corrupt to the core and always has been. It’s the kind of world the New Yorkers want. Everyone thinks that they have a piece of the action and to protect that piece they will do anything and endure anything. Screw’em, they are getting exactly what they deserve.

I agree with you on this matter, but of course personal preferences will outweigh jurisprudence, being that this is all “for a good cause” and naturally it is “for the children.” Which is why is invariably takes a law suit when a crack weasel like Cuomo plays his political games.

That is indeed the question. Perhaps some group like ACLJ might launch against the Cuomo cabal, but whoever turns up needs deep pockets. But truthfully, Cuomo wouldn’t be acting up against the people like this if he didn’t have fellow travelers roaming the Southern District giving him aid and comfort. A lawsuit has to be aimed squarely at the supreme court, and actions prior to arrival will be a mix of foundation and kabuki theatre [the latter being run by the state].

Don’t forget that New York is using the force of the State to shut down speech of disfavored groups, so it’s shitty on both 1st and 2nd amendment grounds. It’s an attempt at prior restraint, and I suspect that’s why they’re being so roundabout in this effort. They know for a fact it’s against the law, so it’s phrased as a ‘suggestion’ while carrying a baseball bat.

And the imbecilic, myopic progtards like Tony will say “SO? I hate the NRA! Good!”, never realizing that these same regulatory shackles and fetters to freedom could so easily be applied to them. “But the state would never have a problem with anything I say or do! I’m on their side!”

Yes, Mr Beria, you are…. yes, you are.

“But it was all right, everything was all right, the struggle was finished. He had won the victory over himself. He loved Big Brother.”

The only one I’ve ever noticed to ‘cling’ in this forum is you, rev. Its as if you think if you post stupid shit often enough, it will make it true from the sheer force of clingyness alone.

So keep clinging in a bunch of forums that where everyone understands that you’re a laughing stock. It doesn’t make your broken thoughts any more valid, but it does make you someone who’s wasting his life thinking he’s bringing harm to those he hates, as if that were a virtue.

To what do you think you are progressing? The only thing so-called “progressives” have to offer is the same thing that’s been on offer for ten thousand years of civilization: serfdom. Just 250 years ago, Anglo-Saxons finally broke away from that ancient ideology for civilization, finally realizing individual liberty and property rights for all. So-called “progressives” want a return to serfdom, where politicians control everything, while the people get to live on whatever politicians decide we can have.

I’m sure there’s some wit and wisdom buried somewhere in those 28 words, but it’s early and so I’m damned if I can figure out what it is, much less why I should devote any more energy to figuring it out.

most Americans don’t want Wall Street banks telling them what they can or can’t buy.

Politically true. He’s also considering that there are a whole lot of gun owners, who tend to be passionate about gun rights, who have effective means of communication, and almost all of whom have bank accounts, mortgages, and so forth.

Democrats are desperate for somebody, anybody, with even one iota of charisma or personality but all they keep coming up with are billionaire and millionaire people that mutter the right words about diversity and stuff yet consistently vote to line their own pockets while ordering their underlings to blow holes in all the minorities in their strongholds.

They’re going to go out and find a black woman, possibly in Congress, that’s a back bencher and will do whatever the party wants. This person will have virtually no background or voting record, and you can bet they’ll rely on opposition to Trump to attempt to get elected.

My two cents. It’s what I would do if I were them and had no morals or scruples, but I repeat myself.

That might slow her down. My understanding is she’s vodka powered, which means crack would do for her what ritalin does for the truly ADD. I wouldn’t mind seeing her do the quaalude shuffle on tv, come to think of it…

Because technically they only have jurisdiction over entities which have consented to their laws by choosing to do business in their state. They have no jurisdiction over, for example, First California Bank as long as 1st CA does no business in NY.

Now, I could argue that their legal theory is no longer valid under (Gonzales v. Raich, I think?) which determined that even a minuscule amount of marijuana grown, sold and used only within a state was nonetheless sufficient to affect interstate commerce and to uphold a federal law against it. If such a purely intrastate transaction affects interstate commerce, then the NY regulations do so as well – and the Dormant Commerce clause should kick in. I would rather not make that argument, however, because I think that case was wrongly decided. Thomas in his dissent had the far better argument.

I think you’re referring to the Perez case. Perez was founded on one of the most fascistic decisions of the FDR era, Wickard v. Filburn (1942) which argued that, by growing wheat on his own farm for consumption by his own animals, Filburn affected adversely the price of wheat in interstate commerce by NOT buying wheat in the local markets. As Justice Thomas pointed out in Perez, it is difficult to imagine any activity that would not come under federal commerce jurisdiction to the extent Wickard remains good law.

urge insurers and bankers statewide to determine whether any relationship they may have with the NRA or similar organizations sends the wrong message to their clients and their communities who often look to them for guidance and support,

not just loans but the processing of credit and debit cards, square one already refuses to process all sporting goods stores so I refuse to shop at any small store that uses it and i let them know why. This is a small reason why so many want a cashless society so that they can shut down businesses they don’t like

They’ve been using this trick for years. Like when they “convinced” the credit card companies to stop paying for online cigarettes to anyone living in NY. Always accompanied with a smug “New Yorkers don’t want this” attitude. Banana republic mob rule shit.

Albeit an upper East Cost we are smarter and better than you flyover bumpkins banana republic. They do not think it is even remotely possible these type of shenanigans will ever come back to bite them.

Yeah, the Republicans won’t be in power in NY, but just wait until some other state like AL or GA decide to use their regulatory authority to punish banks and insurers for doing business with Planned Parenthood or Greenpeace or some shit. The screeching from the left will be unbearable.

They did in 2016. Trump only won because of the contempt Democrats have for their base outside of the metropolitan centers. Bubba could have held onto the voters that Hillary lost, and the Dems may well never get them back especially as they push ever more leftward.

To camouflage the law-changing power of libertarian spoiler votes, the Kleptocracy shrieks at lobbies (Naral, NRA, LEAP, MADD) as agents of change. In fact, the LP and the Liberal Party before it were the prime movers that struck down coathanger abortion laws, felony beer prohibition, Comstock censorship, exercise of conscription, prohibition of plant leaves, gay baiting. Communo-fascist third parties were goood as an excuse for expanding Kleptocracy power. But the LP works to reduce coercion, is therefore baaad, and must be crushed the way Nixon intended. When attacking lobbies fails, the gloves will come off.

As the Compliance Officer at my current company likes to say, “[the regulator] can’t make you do it. But he can make you wish you had.” The power of petty bureaucrats to retaliate is hard to overestimate.

Almost exactly the same logic the federal government uses to compel states to embrace federal programs: “if you do what we want there’s money in it for you, if you don’t then the money disappears”. And SCOTUS has said this does not constitute federal invasion of state power because, after all, participation in X federal program is entirely voluntary.

the next letter will ask corporations to evaluate their associations with certain political parties. this whole thing is unconstitutional but people are allowing it. I do believe though the NRA could sue based on them eliminating their choices for practicing constitutional rights. If they can force bakers to bake then they can force banks to bank

This is an astonishing, though entirely predictable, consequence of “Know Your Customer” mandates to the financial industry. These and other IRS requirements have destroyed banking privacy. Thank you, War on Drugs, for facilitating progress toward a totalitarian state.

FDR was a fascist — not a Nazi, not the savior of capitalism, but a fascist — and his policies, from the National Industrial Recovery Act to the War Production Authority, were lifted straight from Mussolini’s Italy.

As for those who still claim it never could happen here, take the time to look up Manzanar or Tule Lake.

It’s amazing what gets left out of your kiddies government-approved history books.

FDR did everything in his power to destroy capitalism and destroy the constitution. He largely succeeded. He left us with a political legacy that is currently destroying the country, starting with the Orwellianly named “social security”.

“Not much has changed since then, as business hopefuls continue delivering bribes to current Mayor Bill de Blasio and Governor Cuomo in hopes of getting their projects green-lighted (the officials themselves remain seemingly immune to prosecution for receiving bribes?probably because they make the laws).”

I continue to hope that New Yorkers will find a peaceful way to deal with Cuomo, DeBlasio and the rest of the vermin who infest that unhappy state. No wonder that these scum want to disarm decent people before enough of them wake up. Say what you will of them they would not have achieved their goal of committing oppression if they were stupid.

Well, there are a few million people who would likely shred their citibank issued credit cards and switch to something else. The banks who play ball with Cuomo are not going to like one particular result if they follow the pied piper: money velocity will go down. For a bank, that’s the kiss of death – they make most of their money on a transactional basis with fees, and credit cards loom large for daily cash flows.

The actions of the New York and California state governments should scare the hell out of all of us. Both are shining examples of our future if progressives actually achieve true power. They have no problem using the government to mandate and dictate every aspect of our lives. These state governments have become the very type of government the Founding Fathers wrote the US Constitution to protect the people from and why returning to a true Constitutional federal government is so critical. Since the early 1900s, the Federal government has centralized more and more power until it became the intrusive, overbearing entity it is today. Now progressives are attempting to take that success to the state level as demonstrated in NY and California.

“I am directing the Department of Financial Services to urge insurers and bankers statewide to determine whether any relationship they may have with the NRA or similar organizations sends the wrong message to their clients and their communities who often look to them for guidance and support,”

So all the banks need to contribute to the NRA to show their respect for the constitution, and recommend that their customers do so as well?

The Department encourages its chartered and licensed financial institutions to continue evaluating and managing their risks, including reputational risks, that may arise from their dealings with the NRA or similar (Constitutional) promotional organizations, if any, as well as continued assessment of compliance with their own codes of social responsibility. The Department encourages regulated institutions to review any relationships they have with the NRA or similar (Constitutional) promotion organizations, and to take prompt actions to managing these risks and promote public health and safety. There, fixed it for you.

“The Department encourages its chartered and licensed financial institutions to continue evaluating and managing their risks, including reputational risks, that may arise from their dealings with Governor Cuomo, the Democratic Party in New York, or similar promotional organizations, if any, as well as continued assessment of compliance with their own codes of social responsibility. The Department encourages regulated institutions to review any relationships they have with Governor Cuomo, the Democratic Party in New York, or similar promotion organizations, and to take prompt actions to managing these risks and promote public health and safety.”

Cuomo is one of many ass clowns in New York State Government. Corruption, high taxes, and sleazy politics is forcing many residents to leave the State. I have taken NRA courses and been a member for years. Cuomo and his gang of thugs are once again blowing smoke up our arses! To those that enjoy a circus keep electing this man who has run up the debt, neglected infrastructure repair and tosses our tax dollars to the wind. The NRA isn’t going anywhere people! He is a circus clown. (OMO) – one man’s opinion

Here is a definition I found on the Internet of fascism. FASCISM is an economic model in which the state dictates the utilization of privately held assets to achieve public policy goals. Is this not exactly what New York is doing?

Fascism is the other side of the coin on which socialism resides. Fascism a step on the road to socialism.